HEALTH SAFETY AND ENVIRONMENT
COMMITMENT TO HEALTH, SAFETY AND ENVIRONMENT
Novartis has built a leading position in require deployment of a number of separate programs,
Health, Safety and Environment (HSE) together delivering significant energy savings.
by managing risks proactively, apply- During 2004, the Pharmaceuticals Division completed
energy audits at larger energy-consuming sites and pro-
ing sound science and technology, and posed a range of projects to be implemented in 2005–06.
fostering cooperation and deployment
of uniform corporate standards at sites Risk Portfolios
around the world. We communicate Each year, the sites develop risk portfolios, which are con-
our objectives to external stakeholders solidated at Group level. The portfolio, and a list of priority
and report on our performance each risks warranting action, are presented to the Executive
Committee. During 2004, Group sites eliminated 24 of
year in the Annual Report. the year’s priority risks through measures ranging from
As in recent years, HSE activities during 2004 focused on better earthquake protection in Japan and improved fire
reducing carbon dioxide (CO2) emissions and improving protection at plants in Switzerland and Brazil, to upgrading
energy efficiency; limiting water consumption; and con- cooling systems to reduce risks of ammonia leaks at
tinuing to lower the number of industrial accidents, as well facilities in the US, Costa Rica and Poland.
as promoting the health of our associates. This section of All Divisions, Business Units and the Research Organi-
the Annual Report describes the most important measures zations have started to implement Business Continuity
taken during the year to fulfill our ambitious HSE targets. Management. In particular, vulnerability studies for defined
In 2001, Novartis set a target of reducing Group CO2 key business processes have been conducted, and appro-
emissions by 3% by the end of 2003. The actual reduction priate strategies elaborated. The implementation of pre-
achieved by the end of 2003 was 2.8% – in spite of 4.8% ventive actions and measures is ongoing. The develop-
growth of production during the period. Our level of CO2 ment of Business Continuity Plans has been initiated and
emissions relative to sales is well below the pharma- will continue through 2005–06.
ceutical industry average. The assessment and safeguarding of chemical land-
The integration of Lek Pharmaceuticals, the leading fills from company activities several decades ago is a con-
drug company in Slovenia acquired by Sandoz two years tinuing task of risk reduction. In response to requests from
ago, allowed steady progress in reducing CO2 emissions, as authorities in Germany, France and Switzerland, the local
well as water consumption. Lek sites obtained ISO 14001 chemical and pharmaceutical companies in the Basel
recertification in 2004 – an important validation of the region – including Novartis – have formed a consortium to
quality of HSE management. assess all former landfills, and to seek timely solutions to
While Novartis remains committed to further reduc- the possible consequences of past disposal practices.
tion of CO2 emissions – and will report absolute levels of Considerable progress has already been made regard-
CO2 emissions annually – HSE activities relating to energy ing the cluster of landfills in the Basel region, and the aim
have entered a new phase. The Group has adopted ener- of concluding all risk assessments by 2007 is in sight. Dis-
gy-efficiency targets for 2004–06, calling for each business cussions with the respective authorities are at an advanced
unit to improve energy efficiency by 2% a year. Half of this stage, or have already culminated in formal agreements.
reduction, 1% of annual consumption, should come from The risk assessments being conducted by external spe-
concrete energy-saving projects. cialists in this field will allow the authorities to determine
Relatively modest improvements in energy-intensive if remediation is needed – and if so, to establish details of
processes like fermentation can generate large savings. the subsequent remediation program.
This year Sandoz will continue to redesign its mainstream The Lost-Time Accident Rate (LTAR) is one of the most
fermentation operations, incorporating advanced technol- tangible measures of employee safety on the job. For the
ogy in line with the Group-wide energy-efficiency objectives. seventh consecutive year Novartis lowered the Group’s
Many other Novartis facilities around the world have had LTAR, reaching in 2004 the longstanding goal of 0.5 acci-
a continuous focus on energy efficiency for years. Further dents per 200 000 person-hours. That performance com-
improvement toward the new energy-efficiency target will pared with LTARs of 0.7 in 2003, and 1.62 in 1997.
72 NOVARTIS GROUP
HSE Objectives and Achievements for 2004–2005
Results 2004 New Targets 2005
Group Targets LTAR achieved 0.48 (target 0.50) LTAR: Achieve 0.45 lost time accident rate by 2006
2% energy-efficiency improvement exceeded
Achieve an average 2% energy-efficiency improvement
over the years 2004–2006
Pharmaceuticals LTAR achieved 0.46 (Pharma target 0.50) LTAR ≤ 0.45
Energy-efficiency improved by 10% Energy-efficiency improved by further 4% by 2006.
Releases of drug substances to the environment Further reduction of drug substances releases
reduced by 15% in effluents from manufacturing sites by 15%
HSE management systems introduced at 65% of Full implementation of HSE management systems
major manufacturing sites comparable to ISO 14001/OHSAS 18001 at all
strategic Pharmaceutical Manufacturing Sites
Develop concept for improvement of water efficiency
Identify improvement potential for hazardous waste
NIBR & Corporate LTAR achieved 0.37 (target 0.50) LTAR ≤ 0.45
Research Energy-efficiency improvement achieved 2.8% Energy-efficiency improved by further 4% by 2006
Guidance Note on handling scheme for research Substance handling and sample transportation
compounds developed schemes implemented
Sandoz LTAR achieved 0.72 (BU target:< 1) LTAR ≤ 0.70
Energy-efficiency improvement achieved 11% Energy-efficiency improved by further 4% by 2006
Lek (Slovenia) to a great degree integrated VOC: Reduction by 50% relative to production till
end of 2006, based on emissions 2003
Business Interruption Criteria defined
Over-the-Counter LTAR achieved 0.35 (BU target 0.45) LTAR ≤ 0.35
(OTC) Energy-efficiency improvement partly achieved, Energy-efficiency improved by 6% in 2006 versus
however 2006 goal in reach 2004
Handling of active substances assessed with regard
to safety and industrial hygiene, and necessary
Third-party audits conducted for 4 suppliers, Complete third party audits for top 15 suppliers
pre-audits for additional 5
Animal Health LTAR not achieved 0.56 (BU target 0.50) LTAR ≤ 0.45
Energy-efficiency improvement achieved of 19% Further improve energy-efficiency at Wusifarm, China
at Wusifarm, China
Third-party contractors: HSE aspects integrated in Integrate Risk Management System
contracts at headquarters, 15 suppliers in South East
Asia and third-party suppliers in Brazil audited
Medical Nutrition LTAR achieved: 0.10 (BU target 0.60) LTAR ≤ 0.40
Energy-efficiency improvement achieved 2.8% Energy-efficiency improved by 6% in 2006 versus
Third-party audits achieved: 10 (target 4)
Infant and Baby LTAR achieved 0.29 (BU target 0.33) LTAR ≤ 0.30
Energy-efficiency improvement achieved 8% Energy-efficiency improved by further 4% by 2006
3 third party audits (HSE and CC) conducted; Further third-party contractor audits
China 2, Korea 1 (BU target 2)
CIBA Vision LTAR achieved 0.23 (BU target 0.50) LTAR ≤ 0.45
Energy and water efficiency only improved in Energy-efficiency improved by 6% in 2006
in selected sites, however not on BU level versus 2003
Audit of all external waste transportation and
BU – Business Unit; HSE – Health, Safety and Environment; LTAR – Lost-Time Accident Rate (per 200 000 person-hours); VOC – Volatile organic compounds; NIBR – Novartis Institutes for BioMedical
Research; CC – Corporate Citizenship.
Energy-efficiency based on most representative denominator (e.g. sales, production, employee)
NOVARTIS GROUP 73
HEALTH SAFETY AND ENVIRONMENT
While many Novartis sites are located in water-rich areas, Water Recycling Plant: Atlanta, Georgia
ample supplies of water loom as a key environmental issue Water is a critical element in virtually every step of pro-
of the future. Benchmarking studies have shown that duction of CIBA Vision’s Focus DAILIES contact lenses,
Novartis consumes more water than major pharmaceutical- from the mixing of the raw material polymer to high-
industry peers – reflecting heavy demand for cooling water pressure washing of the lens production molds.
at Sandoz factories as well as in the production of contact However, water is a limited resource in Atlanta. The
lenses at the CIBA Vision business unit. Both business Chattahoochee River, which supplies 70% of nearby
units have stepped up investments in recycling technolo- Atlanta’s water, is the smallest watershed of its kind in the
gies to reduce water consumption; the significant decrease United States, yet it supplies the largest water demand of
in this area achieved by CIBA Vision’s contact lens plant any metropolitan region in the country. Alarmingly, the
in Johns Creek offers an example of best practice for other Chattahoochee has been listed twice among the most
Group units around the world. endangered US rivers – reflecting repeated raw-sewage
As a leading health-care company, Novartis is known spills into the river from the Atlanta sewer system, which
for maintaining and restoring health; this commitment is has failed to keep pace with the city’s explosive growth.
equally applicable to the health and well being of associates By the time CIBA Vision’s Johns Creek plant reached
working for the company. full capacity utilization in 2002, daily water demand was
Additional details on HSE activities can be found at expected to approach 7 600 cubic meters. Nevertheless,
www.novartis.com/hse. the final water permit issued in March 2001 allowed daily
discharge of only 3 200 cubic meters – 58% below the
Energy-efficient Fermentation: Kundl, Austria plant’s projected demand. So some form of water recy-
At the main Sandoz production site in Kundl, Austria, cling became a business-critical requirement to meet the
energy-intensive fermentation processes for the manu- needs of the manufacturing operations.
facture of antibiotics account for a large proportion of total CIBA Vision responded with a plant reengineering
energy consumption. When Kundl embarked on an energy plan, cutting water consumption through operational effi-
reduction program in 1999, fermentation was a prime ciencies, and the construction of an on-site water recycling
target. and purification system to permit reuse of wastewater.
The result was a new process that increased pro- It proved to be an economic windfall, as well as an
ductivity by about 20%, while reducing CO2 emissions by environmental success story. The recycling plant cost
22 000 tons per year and annual energy consumption by USD 2.2 million to build and install, but since start-up of
86 GWh. The USD 13 million investment saves USD 3.9 the system in September 1999, cumulative savings have
million per annum. Ongoing activities are expected to reached USD 1.5 million.
further reduce long-term energy requirements. Recycling of wastewater, combined with a careful
Kundl’s giant fermenters, with a capacity of up to reassessment of all water use at the site, enabled
250 000 liters per reactor, require vast amounts of energy Johns Creek to cut discharge of water dramatically to 300
to feed raw materials and cooling water, as well as for cubic meters per day.
stirring the culture broth. Steam is also needed for the The Johns Creek water recycling system also has
inactivation of foreign organisms that could contaminate lowered the risk of contamination of process water supply,
production. improving lens quality and reducing the number of prod-
Kundl’s new process incorporates novel design fea- uct recalls.
tures such as a computer-supervised control system for
optimized operation of steam boilers. Lowering the inflow Bagasse Renewable Fuel: Mahad, India
temperature to air compressors made it possible to achieve Two fuel-oil-fired boilers, used to generate steam at a
higher compression efficiency – and decrease power con- Sandoz production facility in Mahad, India, were a prime
sumption in the air pressure system. Efficiency of feed target for the energy-efficiency program. The boilers
pumps was increased by reducing system pressure in both consumed 4.5 tons of fuel oil per day, an expensive
main cooling systems. energy source as the price of oil climbed relentlessly, but
even more importantly, the boilers emitted 21 tons of SO2,
74 NOVARTIS GROUP
a primary cause of acid rain. In fact, SO2 emissions from will receive the 2005 Novartis Risk Quality Award for
the two Mahad boilers represented one-sixth of the achieving 100% of the maximum achievable risk rating.
Novartis Group’s total annual SO2 emissions. These investments will lead to estimated CO2 emission
In April of last year, the Mahad plant completed instal- savings of 4 500 tons per year – and an annualized cost
lation of a new boiler using bagasse, fibrous waste from saving of USD 1.2 million.
sugar cane that is a by-product of sugar production.
Bagasse is a promising source of renewable energy in Health Promotion: Switzerland and Costa Rica
countries ranging from India and Pakistan to Costa Rica Two years ago, the Pharma Affairs function launched a
and Brazil. The new boiler design will save an estimated Health Promotion program for associates based at sites in
USD 150 000 per year – and lead to a significant 40% Basel. Convenient activities available to associates range
reduction in emissions of SO2. from smoking-cessation counseling and dietary programs,
In an added benefit to Mahad employees, the conver- to skin cancer screening and flu shots.
sion to bagasse reduces risks associated with the trans- During 2004, more than 1000 associates received
portation and handling of fuel oil. And at a time of volatile health check-ups, screened their blood pressure, sought
sugar prices and growing economic pressures on cane medical counseling or participated in the site’s yearly Non-
producers, use of bagasse as a renewable energy source Smoking Day. More than 100 associates were screened for
can provide a stable, additional revenue stream. At the skin cancer – with two early-stage, malignant skin cancers
same time, Thurbe, our second chemical site in India, is detected and successfully treated. More than 400 people
now using a low-sulphur furnace oil with a sulphur attended Healthy Nutrition events, and roughly 13% of
content of less than 2% w/w., i.e., 50% less sulphur at daily lunches served at the Basel staff restaurants are
marginally higher cost. fit@work lunches – containing less than 500 calories – to
help associates shed extra pounds without depriving
NIBR Headquarters Building: Cambridge, MA themselves of sound nutrition.
The Novartis Institutes for BioMedical Research (NIBR) in At the Group’s industrial sites around the world,
Cambridge, MA, overcame potential environmental con- ergonomics is a key dimension of health protection. For
cerns in transforming a 46 500 m2 former candy factory, the past five years, hundreds of banana peelers at a Ger-
dating from the 1920s, into a state-of-the-art research ber Products baby food factory in Cartago, Costa Rica,
laboratory that opened in April of last year. have followed a physical therapy program to avert cumu-
The metamorphosis began with only the frame of the lative trauma syndrome (CTS).
former New England Confectionery Co. (NECCO) building A disorder that results from accelerated or aggravated
standing – and involved removal and disposal of asbestos repetitive movement or poor working postures, CTS can
and PCB ballasts/transformers, lead-based paints, sur- lead to severe symptoms such as tendonitis, and muscle
faces with potential to cause microbiological growth and contractures. Cartago’s mandatory, collective exercise pro-
soils on the property impacted with petroleum and small gram employs special equipment and postures to build
amounts of other hazardous substances. This extensive strength, flexibility and resistance to CTS. All peelers repeat
remediation of the property has resulted in an environ- the collective program at least every two weeks. In
mentally friendlier space for the community, as well as the addition, therapists work out individual exercise programs
associates working in the building. for peelers for recovery during short production breaks or
The new building will ultimately be home to more than unscheduled stops.
700 scientists. It was designed to achieve a high energy- Correct posture – and constantly switching between
efficiency standard relative to local requirements, with standing and resting positions – helps to minimize fatigue
installation of laboratory hood exhaust controls, high- during working hours. Peelers also learn to alternate hands
performance chillers, high-performance lighting and a when peeling bananas; to grab the fruit so that their whole
heat recovery system. palm and fingers make contact with the fruit’s surface; and
A new air humidification system reduced safety risks to rest their bodies on the leg opposite the peeling hand.
associated with static electricity, and the fire protection
systems are state of the art. As a result, the new building
NOVARTIS GROUP 75
HEALTH SAFETY AND ENVIRONMENT
Health, Safety and Environment 2004 Data
NIBR & Corpo-
Pharmaceuticals rate Research Consumer Health Division
2004 2003 2004 2003 2004 2003 2004 2003
HSE personnel [employees working at least 50% for HSE] 179 174 19 2 139 121 9 12
HSE investments [USD millions] 66.2 80.7 1.98 0.94 13.3 8.2 0.78 0.70
HSE expenses [USD millions] 106 95.1 13.6 5.88 52.5 36.5 3.77 4.33
Total production [1000 t = metric tons] 22.4 25.2 100 101 15.9 14.9
Water consumption [million cubic meters] 16.6 17.7 1.08 0.81 62.2 66.9 0.41 0.50
Energy consumption [million GJ] 4.91 5.09 0.92 0.53 6.83 6.64 0.29 0.32
Lost-time accident rate [accidents per 200 000 hours worked] 0.46 0.64 0.37 0.70 0.72 1.17 0.35 0.32
Lost work day rate [lost days per 200 000 hours worked] 9.28 12.2 2.48 4.94 15.5 14.3 0.95 4.64
Effluent discharge [million cubic meters] 3.11 3.69 0.28 0.20 8.56 15.7 0.12 0.13
Chemical oxygen demand COD [1000 t] 0.29 0.47 3.24 3.68 0.05 0.06
Water constituents [t] 2.71 6.73 0.01 18.2 16.8 0.18 0.52
(susp. solids, nitrogen, phosphate, particulates, soluble salts)
Carbon dioxide [1000 t2] 154 170 13.7 4.74 162 158 10.3 11.8
Total air emissions (SO2, NOx, particulates, HCl, NH3)5 [t] 193 218 15.9 3.62 224 288 10.9 10.9
Volatile organic compounds (VOC) halogenated [t] 11.0 11.2 280 345 0.02 0.00
Volatile organic compounds (VOC) nonhalogenated [t] 177 196 766 1 060 22.3 18.0
Waste3 [1000 t]
Nonhazardous waste generated 91.9 80.3 2.19 1.36 20.6 16.9 3.02 2.85
Hazardous waste generated 84.6 56.7 0.50 0.41 28.1 25.3 0.35 0.19
Table shows absolute values with three significant digits, 0.00 signifies values below 0.005; 3
Difference between generated and handled waste in 2004 due to treatment of waste stored in
signifies not applicable; more detail can be found in the HSE website. previous years.
To wastewater treatment plant excluding cooling water. 4
Including Nutrition et Santé.
Calculated based on energy breakdown. 5
Hydrochloric acid (HCl); ammonia (NH3).
Global Reporting Initiative (GRI) Restatement of 2003 Data
The Global Reporting Initiative was launched in 1997, with the aim to establish The emissions and resource data published in the 2003 Annual Report included
globally applicable guidelines for reporting on sustainable management. Novartis estimates for the October–December period that required significant adjustments
will provide a report on 2004 operations in the GRI format. That report – along with in several areas. Estimated halogenated VOC proved to be 30 tons too low, while
a more detailed overview of our HSE performance – is available on our HSE web- estimates for nonhalogenated VOC were 230 tons too high. The estimate for
site (www.novartis.com/gri). nonhazardous waste also had to be raised, by 13 000 tons. The Data Table in the
2004 Annual Report includes corrected figures for 2003.
HSE Performance and Data Management The data collection process and performance system is part of the Corpo-
Globally, we now have over 400 dedicated HSE specialists who continuously rate Citizenship assurance process. In gathering this data, we take into account
analyze our risk portfolio and drive action plans worldwide. Together with senior impacts originating on our premises, together with major material flows across
management, these HSE specialists have defined key performance indicators (KPI) their boundaries. We currently do not measure impacts from the manufacture of
for our HSE-related objectives. The KPIs for 2004 are based on the data input from purchased goods, energy or transportation by third parties.
150 sites managed by Novartis Group companies in 2004 – including all manu-
facturing, formulation and research and development sites with significant impact Air Emissions
on the Group’s overall HSE-related performance. In 2004, six sites reported for the Our CO2 emissions decreased by 4% in 2004, compared with the previous year,
first time while four Pharma sites were closed. although the Group’s production tonnage increased by 4%, and several research
Key HSE data are collected and reviewed on a quarterly basis, the bulk of sites were included among reporting sites worldwide for the first time.
indicators are collected on an annual basis. The data on emissions and resources Energy substitution projects – replacing coal at Wusifarm in China and heavy
posted on our website are actual data for the period January–September 2004 – but oil at the Sandoz site in Mahad, India – cut Group SO2 emissions by 25%.
include estimates for the October – December period. Those estimates will be In 2004, halogenated VOC emissions fell by 18%, continuing a positive trend
updated during the first quarter of 2005. Significant deviations from the estimates of recent years. Last year’s reduction reflected process improvements at Sandoz sites
will be reported on our website, and in next year’s Annual Report. The accident as well as process modifications at the Pharma production facility in Grimsby, UK.
and financial data reported are actual data for the full year. Accounting principles
are reported in GRI format on the GRI website (www.novartis.com/gri).
76 NOVARTIS GROUP
Animal Health Medical Nutrition4 Infant & Baby CIBA Vision % change
2004 2003 2004 2003 2004 2003 2004 2003 2004/2003 2004 2003 2002 2001
30 30 7 8 64 97 22 32 -2 469 477 448 502
0.47 0.90 5.97 2.08 1.69 2.79 0.48 0.55 -6 90.9 96.8 33.8 25.7
2.42 2.86 4.33 4.25 7.04 8.01 6.42 6.61 20 196 164 140 126
3.19 3.05 139 132 351 329 15.6 16.5 4 647 622 692 673
0.71 0.82 0.85 1.06 4.24 4.44 0.84 0.82 -7 86.9 93.0 90.3 89.8
0.18 0.18 0.41 0.40 2.04 2.07 0.80 0.76 2 16.4 16.0 15.7 15.0
0.56 0.72 1.08 0.75 0.29 0.26 0.23 0.50 -31 0.48 0.70 0.71 0.72
5.28 2.77 23.7 19.1 3.28 8.44 4.59 10.6 -21 9.16 11.6 13.0 11.9
0.12 0.60 0.83 0.66 3.05 3.12 0.45 0.53 -33 16.6 24.6 21.7 21.0
0.01 0.01 0.70 0.30 0.04 0.04 0.09 0.13 -6 4.40 4.69 4.41 4.27
0.00 0.00 0.04 0.04 0.24 0.17 -12 21.5 24.3 25.0 21.3
5.99 6.05 15.1 17.1 84.8 98.6 13.1 9.82 -4 459 476 473 457
20.8 45.6 19.6 12.9 90.9 96.6 9.9 10.7 -15 581 686 691 903
0.00 -18 292 356 421 759
10.6 5.63 0.60 0.59 26.7 42.1 -23 1 010 1 320 1 320 1 110
0.75 0.73 10.8 10.3 74.8 80.7 5.90 5.69 6 210 199 183 199
0.59 0.61 0.02 0.03 0.03 0.02 0.31 0.21 38 115 83.5 72.4 62.4
Fines and Compliance
In 2004 a global sum of USD 21 000 was paid in fines for minor HSE violations. There were four minor on-site spills with no off-site affects.
Normally halogenated VOC emissions are replaced by less critical nonhalogenat- Resource Consumption: Energy and Water
ed VOC emissions – but we are pleased that the Group has succeeded in also Overall energy usage by Novartis rose by approximately 2% in 2004 – mainly due
reducing nonhalogenated VOCs. to changes in the product mix at Sandoz, as well as the build-up of the Novartis
Institute for BioMedical Research (NIBR) sites in Cambridge, MA, and the inclusion
Waste of the three Novartis Corporate Research Institutes.
Normally waste quantities are related to production volume and product yield. Water consumption decreased by 7% to a level below that in 2001, partly
However, the ongoing redevelopment of a new campus at Group headquarters in because of milder temperatures in Europe during the summer months.
Basel has a significant impact on our waste generation. In particular, decommis-
sioning of old buildings in Basel last year resulted in a 38% increase of hazardous Accidents
waste, most of which was incinerated. We disposed of 19% of total debris in a This year we achieved our ambitious target of 0.5 for Lost-Time Accident Rate
secure landfill. Nonhazardous waste increased as a result of the campus redevel- (LTAR). This achievement is the result of a strong commitment to safety by all
opment project – offsetting a 7% reduction of nonhazardous waste by the Infant Group sites. In addition to technical improvements and ongoing safety activities,
& Baby Business Unit of Novartis Consumer Health. many sites successfully launched programs to improve safety by changing behavior.
Debris from demolition of buildings in Basel and East Hannover is expect- We are committed to this approach and have lowered our LTAR target to demon-
ed to continue over the next few years. Hazardous waste generated by Sandoz rose strate continuous improvement.
11% last year, as a consequence of the rising proportion of newly developed prod- We sincerely regret the occurrence of one fatality this year. One of our sales
ucts where solvent recovery could not be established or optimized up to now. representatives died in a car crash in Egypt while traveling to meet a customer. We
Our waste reduction strategy is to first prevent waste – but then to reduce, would like to extend our sincerest sympathy to the family and friends of the
recycle or safely dispose of the waste that is generated. deceased.
NOVARTIS GROUP 77